Dairy owners feeling the heat

With temperatures soaring across most of the country, dairy owners are sweating market conditions as much as the heat.

Doug Idsinga, a Roosevelt County dairy owner who employs 20 people, said his business has been affected by the heat and the drought.

Idsinga said he does his own farming and the lack of rain has hurt the corn he grows to feed his dairy cattle. The heat is causing mites to attack his corn and forcing him to pay to spray, he said.

“I usually never have to spray for mites,” Idsinga said. “I have to this year or run the risk of losing the crop. I’m paying $22 an acre to spray.”
Idsinga said he is dealing with additional expenses this summer, as well.

“We’re (dairy owners) taking a hit from gas prices, too,” Idsinga said. “Last year I was paying $3,500 a month on fuel, this year I’m paying $12,000. We’re getting hit from every direction. Some have had to shrink their herds. We’re having to spend on water to irrigate the lands and feed has also gone up $50 a ton. Last year hay was $140 a ton and this year it’s $200 a ton.”

Victor Cabrera, a Clovis-based dairy specialist for New Mexico State University’s Cooperative Extension Service, said the heat wave has impacted dairy owners nationwide.

“The unusual temperature has impacted the industry in general, especially in California,” Cabrera said. “Cows are dying off because of the heat wave.”

Cabrera said hot temperatures have hurt the amount of milk production from New Mexico dairy cows.

“When the air temperature rises above 72 degrees, it’s going to start to affect the milk production,” Cabrera said. “Holstein cows are sensitive. Heat stress causes a decrease in the amount of milk they produce.”

Cabrera said, on average, a New Mexico dairy cow produces 70 pounds a day, but during recent hot conditions the average has decreased 5 pounds per day (7 percent). A dairy owner with 200 cows, for example, is losing 1,000 pounds of milk a day.

If that isn’t enough, dairy owners are also having to deal with a drop in milk market value compared with the same time last year.

“For the month of July, milk futures are at $10.95 a hundred-weight,” Tana Williams, a broker with Southwest Commodities in Clovis, said. “For those who have a lease on their dairies, they have to be making around the $12 range to be able to break even.”

Idsinga said he was getting $14 per cwt in July 2005, but this July he’s getting $10.50 per cwt.

Williams said at the end of May, milk futures were at $12.20 a cwt, dropping almost $1.30 per cwt. By comparison, in July 2005 milk futures were $14.36 per cwt, almost a $4 in per pound drop in the last year, according to Williams. Two years ago milk futures were at $20 per cwt, she said.

Williams agreed with Idsinga that dairy profitability problems have more to do with supply and demand than the drought.

Good news lies ahead for dairy owners, though. Williams said in August milk futures are projected to be traded for $11.05 per cwt and in September $12.17 per cwt.

Also, Cabrera said the unfortunate disaster in California could benefit New Mexico dairy owners. Less supply from California will mean other states will have to increase their milk production.

Still, for now, Idsinga said not only dairy owners but those in the agriculture industry are going through an even tougher stretch because of the lack of rain.